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HOUSTON – Even as the boycotts increase supply from Russia, the major oil producing countries are likely to hold the production line for now, keeping prices high and reaping the benefits. But this course can be harmful in the long run.
This is the opinion of Ihsan Abdul Jabbar, Minister of Petroleum of Iraq, a member of the Organization of Petroleum Exporting Countries. OPEC Plus – a group of 23 nations, including Russia, the world’s number 3 manufacturer – will stick plans to increase production by a modest 400,000 barrels per day next month.
But in an interview Wednesday, he said Iraq and other Middle Eastern manufacturers were concerned that higher prices could accelerate the transition to electric vehicles and reduce reliance on oil.
“We are happy in the short term, but not happy if this continues,” said Abdul Jabbar, who is in Houston to attend CERAWeek, an energy conference.
He said even OPEC’s current course could change by May if oil prices continue to rise due to Russia’s invasion of Ukraine. “OPEC will stay on the program,” he said. “If there are real sanctions on Russian oil, OPEC will make the right decision – if there are real shortages.”
But he said that neither American officials nor anyone else could force OPEC’s hand and that its decisions would be based on the advice of its analysts. “No one can convince,” he said. “OPEC is listening to research reports.”
Abdul-Jabbar said that due to the coronavirus pandemic and low global demand, little energy investment has been made in the Persian Gulf region over the past two years and it will take time to increase production significantly. He estimates that Iraq, one of the world’s most important producers, could manage an increase of just 40,000 bpd, a decline in a global market consuming 100 million bpd.
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